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The Power of Trust webinar took place on 12 June. If you missed it or want to watch again, the webinar is now available to view on demand!

Listen to what our speakers had to say about why trust is key to long term competitive advantage; learn how to repair and build trust and how to understand its dynamics in your own organisation.

Our webinar panellists included Dr Diannah Lowry, Lecturer in HR Management at The Open University Business School (OUBS) and Kelly Drewery, Director at Talent Glue. Facilitating this virtual event was Associate Lecturer Peter Wainwright, host of our previous Business Perspectives webinars.

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Here we introduce you to our seventh Business Perspectives summary report in the series. This report takes a look at the wider world of Trust and the latest trends relating to social media, content, personalisation, responsibility and work and culture.

It also showcases highlights from the masterclass in London which focused on The Power of Trust within the workplace. If you missed it, you can watch video highlights and join in the discussion with The Power of Trust webinar on Thursday 12 June at 7pm (BST).

We invite you to download and share the report and send us any comments. If you would like to contribute your perspective towards future themes, please contact our Business Perspectives Editor at oubs-alumni@open.ac.uk.

Guest blogger: Richard Byford, Open University Business School MBA alumnus and Director of Stablebridge Ltd, a company specialising in business resilience and repairing broken business relationships.

It used to be that you could build your reputation or brand simply by spending money on advertising and clever PR. As long as your name didn’t make it into a scandal story on the television or newspapers, you could buy a reputation as easily as writing a cheque.

Now, however, everybody with an Internet connection is waiting to take a poke at you for no other reason than that you have annoyed them. Last week I spent an interesting day at the Open University Business School’s Business Perspectives ‘The Power of Trust’ event, learning how trust is won and lost in a world where you can be demonised by a single tweet. It was a good day to pull together all my thinking about the subject:

1. Be capable

People trust people and brands who consistently deliver what is expected. Don’t promise a product that doesn’t do what it says on the tin. Don’t promise services you can’t deliver. Meet or exceed peoples’ expectations.

2. Be benevolent

It is not enough to ‘do no evil’; you need to actively do good. People will only trust you if they know that you are acting in their interests. No amount of words will compensate for being caught doing something bad. Make sure your staff fully understand that you expect them to ‘do good’ as well. Align your reward systems to ‘doing good’ as well as meeting KPIs.

3. Be authentic

Have integrity. Know what your values are, propagate them through your organisation and make sure that everybody sticks to them – even when nobody is watching. Integrity is all about living your values. Making values explicit is a key trait of leadership.

4. Be fair

Be consistent and predictable in your dealings with everybody. Align your processes and procedures so that everybody knows where they stand all the time. Set peoples’ expectations and stick to the plan. People will trust you if they understand that justice and consistency is built into all your systems.

In preparing a few thoughts to bring to the next Business perspectives Masterclass in London on The Power of Trust, I’ve been thinking about the value of trust for organisations and the people in them.

Trust sounds great for the organisation. It creates value in the form of goodwill – lots of people trusting the leaders, trusting the brand, trusting each other. We strive to build that utopian workplace through shared values, shared goals and an emphasis on integrity.

In the work I do, I often see the impact of distrust on people’s behaviours and performance. But I also see the impact of too much trust as people emotionally fall fowl of ambiguity, downsizing, personality differences, competition, etc. There is a good reason that there is an active industry of work-life coaching to support people in picking up their broken pieces… especially during an economic downturn.

So, I’m pondering on four questions for the masterclass next week:

1. Do employees and customers gain anything from showing trust in the organisation?

2. Do organisations take advantage of our goodwill?

3. Is it ethical for organisations to build trust and then break it?

4. During an economic downturn, does it matter if employees don’t trust you?

What do you think? And what questions do you want answered by the Trust experts next Thursday? We want to hear from you.

If you would like to attend The Power of Trust Masterclass, further information and details on how to register are available on our website.

This post was originally published via LinkedIn on the Open University Business School Postgraduate Alumni Network.

This content first appeared on HRZone, an online HR publication dedicated to bringing science, opinion, analysis and insight to bear on the rapidly-developing HR function.

Culture plays the role of cement in binding the members of a group together. If cement is not good it malfunctions and affects the bond that exists between the members of a group. If the element of trust misses from culture then mistrust creeps in. Mistrust weakens the relationship among the members of a group. Furthermore, it becomes difficult to achieve a common goal in the presence of mistrust. Now look at mistrust in the context of an organisation. It weakens relationship among the members of an organisation. Employees feel vulnerable as they are always suspected. Workers do not give their best that affects production, services and sales. Organisational profits decrease. Issues of workforce engagement arise and employee turnover increases. Chances of cheating and deceit within organisation increase. Different studies have revealed that almost 60-65% employees of companies do not trust their leaders. Reason is absence of the culture of trust within organisations. Obscure agendas, concealing organisational aims & goals, dishonest and unbiased leadership, tax evasions, employee benefit cuts, lack of readiness at the part of organisational leadership to hear employee feedback, unclear performance goals and hidden employee performance measuring scales are some of the major reasons for the culture of mistrust in organisations.

After facing the consequences of the culture of mistrust now organisations are realising the importance of trust. Therefore, all around the world companies are trying to make cultural changes in this regard. But cultural change is not as easy as it sounds. It takes time, commitment and efforts to replace the culture of mistrust with the culture of trust. The following practices are helpful in building the environment of trust:

Study the actual reasons of mistrust and learn about the damages it is causing.

Always have clear aims & goals in front of you that what do you want to achieve by having the culture of trust in your organisation.

Create a clear program in this regard. Have workers on board during the course of crafting it.

Set performance measures to gauge the performance of the program. Satisfied workforce, low employee turnover and increased profitability can be some of the performance measures in this respect.

Leadership must take the first step in this regard by being as role model. Cultural change travels fast from top to bottom.

Leaders should reduce the say-do gap.

Fulfil promises that are being made with the workforce.

Make your workforce understand the importance of trust. Offer training and courses in this regard.

Not just in their professional lives leaders must try to be honest in their personal matters as well.

Do not over estimate your employees always assign those goals to them that they can achieve.

In case of failure be polite and generous.

Always separate dirty fish from the rest in order to avoid setbacks.

Remember in many cases mistrust spreads due to unclear and biased programs of performance management in organisations. Create a clear and fair system in this regard and award rewards on the basis of performance.

Tell inspiring stories to your workforce in regard of trust.

If an organisation is making cultural changes in terms of trust it does not mean that its leaders close their eyes and start trusting everything they hear, they must always keep their eyes open to avoid any setbacks. Keep it in mind that it takes time to clear the poison of mistrust from the environment of an organisation, thus be patience. Environment of trust takes time to grow. Leadership of an organisation plays the most important role in it.

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Have you read our latest blogs on trust? Do you want to find out more about why trust is key to long term competitive advantage and learn how to repair and build trust? You can understand its dynamics in your own organisation and continue the discussion at the next Business Perspective Masterclass on The Power of Trust in London on Thursday 22 May 2014. Join a host of experts from industry and academia.

Further information on the programme and details on how to register are available on our website.

This content first appeared on HRZone, an online HR publication dedicated to bringing science, opinion, analysis and insight to bear on the rapidly-developing HR function.

Trust, like love, makes the world go round. Academic writers and practitioners alike believe that it has significant benefits.

Trust can lower costs, as it removes the need for significant monitoring and controls. It encourages customers to return and can give companies ‘the benefit of the doubt’ – and often precious additional time – when they make mistakes. In the workplace, trust can make for a more co-operative workplace, leading to more altruistic behaviour, not to mention an attachment to the company itself.

There are a lot of claims for the impact of trust in the workplace, not many of which are unequivocally supported by hard data, but studies have shown an association between trust and increased effectiveness, lower turnover and – that Holy Grail of organisational effort – successful change management.

The subject is currently at the forefront of the UK psyche. In recent years, we have had the parliamentary expenses scandal and the ‘sexed’ up dossier that led to war. We have seen the police changing witness statements to the Hillsborough disaster, financial institutions fixing the Libor rate, and members of the Metropolitan Police Service accused of fabricating evidence to force the resignation of a democratically elected politician. This doesn’t even touch the sex scandals to come out of the Catholic Church in recent years, or the furore of pharmaceutical companies accused of marketing products illegally, or the newspapers hacking phones.

The key institutions of society – church, politicians, business and the police – have all played their part, their actions chipping away at the fragile structure of trust.

The Edelman Trust Barometer, a global study through 26 countries and which surveys more than 30,000 people, provides some evidence of this conclusion. Although trust as an aggregated concept is apparently on the rise globally, it’s not that surprising that only slightly more than half of the respondents trust business and the media, and less than half trust in government. Perhaps more interestingly, business is not trusted because it is seen as corrupt, supported by ill-conceived incentives which drive corrupt behaviour. Governments, on the other hand, are not trusted because they are perceived as incompetent.

This echoes one of the (many) academic definitions I have come across – which considers the elements of trust to be benevolence (or concern for others), integrity (a form of morality) and competence – or being capable of doing something.

So according to the theory, the Government is seen to lack competence and business is seen to lack integrity, so trust is, if not impossible, highly unlikely.

A recent mindstretch® event, held with Lansons Communication, pulled together senior leaders from a range of organisations, including some of the financial big-hitters. Their response from a corporate perspective was that yes, of course, trust is essential to organisations and for many, it’s absent. Ask about their perceptions as consumers and customers and the picture becomes a bit more complicated.

While few people might put their trust in the institution or company, many who have personal contact with the organisation feel differently. So although you might not trust the bank, you would certainly place trust in your personal banking manager. And because of that relationship, you’re unlikely to move banks, regardless of reprehensible behaviour elsewhere in the organisation.

Many academics believe that trust comes from social interaction – face to face, phone, or through correspondence or email. This seems intuitively sensible and it might lead you to wonder why banks are cutting back on so many front line staff.

This interaction has to be natural, according to our mindstretch(R) participants; and those representing the organisation have to be able to help you. This brings us right back to the need for competency to develop trust. Someone speaking to a script is enough to engender scepticism in the most generous of customers, because most of us can spot a practiced line at a hundred paces. This is where you might assume that the person speaking on behalf of the company doesn’t really have your interests at heart because the script was written by the organisation – thus showing a lack of benevolence, essential for a trusting relationship. Ironically, scripts also demonstrate a fundamental lack of faith between the organisation and their staff – they can’t be trusted to even speak their own words.

The shining exception to this is of course, First Direct, who at least TELL you when they’re about to go on script – but otherwise, their customer service staff are exemplars of what you really need to develop trust between customers and companies – real human beings.

This positive, human interaction might also help when things go wrong. One of our participants told a story about a department store who got things very badly wrong – but said that she remained a loyal customer because the organisation was “so nice”. As a First Direct customer, I feel rather like that myself.

However, when we get to the online environment, this fairly intuitive state of affairs seems to fall apart. For here we have an environment where none of the verbal or visual cues on which we would judge someone’s trustworthiness are available to us – there is no personal interaction. But millions of us will place huge amounts of trust and money in online retailer Amazon without thinking twice. When you envisage the emotional investment in an occasion like Christmas, the delivery of a particular item to a family member or loved on, the very idea of entrusting that to a faceless, wordless transaction on a computer seems absurd. Yet we do it, year after year. And here, the compensating factor is delivery – or competency. It’s no hassle to order, no hassle to return, and there’s a series of emails which manage your expectations at every stage of the purchase.

Looking at how trust is created in organisations between management and employees, the literature indicates that communication is crucial. It is a major element of creating perceptions of procedural justice, which reflects perceptions of the fairness of how decisions have been reached. Procedural justice relies heavily on communication both outwards from the firm, and back to the firm in the feedback of employees, or their voice.

If you believe that trust is based on beliefs about the other party, then it’s obvious that those perceptions can be shaped through information. The quality of communication by an organisation or manager – that is, that information is useful, relevant and timely – can have a positive impact on how trustworthy employees believe their organisation is. Yet I’m constantly surprised at the low priority given to communication by senior leaders. Many do not believe this is a management responsibility, they think it’s too time-consuming and leave it to someone else – either the internal communication department, or HR. Yet their very lack of effort here could be undermining trust between the organisation and its employees because it undermines perceptions of organisational justice.

As for consumers – I wonder if we get the organisations we deserve.

For example, I wouldn’t leave my bank unless it really did something appalling to me. It may be that the financial sector is particular in this – it is easier to buy groceries elsewhere, if one of the major supermarkets treated you badly, less easy to swap bank accounts, where standing orders and direct debits are woven through our lives like a very sticky spider’s web.

But really – do we have such low expectations of our financial institutions – banks in particular – that it would take something MAJOR to happen before we’d move? Perhaps we ought to be more demanding. Customer inertia cannot be helpful when we simultaneously suck our teeth when misdemeanours come to light and tut disapprovingly. If we are unhappy with the way in which business acts, then as customers we too need to act. Being “good” in business needs to have both reward and consequence. I’m not sure it does at the moment.

This content first appeared on HRZone, an online HR publication dedicated to bringing science, opinion, analysis and insight to bear on the rapidly-developing HR function.

A while ago I was working with a leadership team who got into a debate about trust. The team was split with the senior leader insisting their role was to mitigate risks by putting in place policies and policing people to ensure the company was safe. His starting premise was people are not trustworthy, if they can they will cheat the company. Others in the team held a different view which can be summed up as ‘if you trust people they will respond honestly’. This debate got me thinking about the neuroscience of trust and how our starting point impacts the levels of trust we obtain in practice. Given trust is a core component of employee engagement, according to many studies, including the Edelman Trust Barometer, the levels of engagement possible in the company will be dependent on the level of trust. So what has neuroscience got to add to our understanding of trust and engagement? You can see a brief video on the neuroscience of engagement here.

HR is often the developers of policy and custodians of the cultural norms that promote or inhibit trust. Understanding how trust works at a biological level and the science about what creates trust is an important element in guiding policy and advising leaders. Here are some of the key components about trust through a neuro-scientific lens.

The moral scientist

Much of the work on trust has been carried out by Paul J. Zak who is a neuro-economist at Claremont Graduate University in Southern California, you can see his TED video talking about his work here. Zak has found that countries with high trust levels are also the most economically successful. There may be a hint here for business leaders and HR too! There is some direct evidence that levels of trust correlate to business success. Data from a study of organisations indicates that the relationships that link individual and organisational values to outcomes are explained primarily by the trust employees have in the company and colleagues.

The trust molecule

Zak started out looking at morality and thought that oxytocin might be an element in morality. He focused on trust as a more tangible element to study. He and his colleagues carried out research to understand how the human brain determines when to trust someone and when not to trust someone. Participants took part in the Trust Game designed to study individuals’ propensity to be trusting and to be trustworthy. In his experiment participants’ oxytocin levels were monitored throughout the study. The researchers found that when participants felt they were trusted, their brains responded by producing oxytocin. When participants were shown increased levels of trust their brain produced even more oxytocin. Most significant however, was the finding that the rise in oxytocin levels resulted in participant’s behaviour being more trustworthy. The researchers conclude that people who feel trusted become more trustworthy as a result of increased oxytocin levels in their brains! Zak calls oxytocin the trust molecule.

There are differences in brain activity depending on whether people trust conditionally or unconditionally. If people trust each other based on certain conditions being met, like delivering a project on time or keeping commitments, the brain’s reward centres the VTA ( vental tegmental area) activates. Unconditional trust activates the septal area.

Experimenters also found that changes in oxytocin related to levels of empathy and that the changes in oxytocin predicted people’s feelings of empathy. Zak believes it is empathy which makes us connect to others; connection to others triggers moral behaviour an element of which is to be trusted. We want to help people, this makes us feel good about them and so we act well towards them. This is not new – Adam Smith said in 1759 in his book the Theory of Moral Sentiments that we are social beings and therefore share the emotions of others, if we do something to make someone happy we share those emotions too. Neuroscience has now shown that Smith was right.

The dark side

But what about when people feel distrust? Zak and his team discovered that when male participants are distrusted it causes a rise in the levels of a hormone called dihydrotestosterone (DHT). Increased levels of DHT increase the desire for physical confrontation in stressful social circumstances. This suggests that men have an aggressive reaction to being distrusted. And women? Women are what Zak’s calls “cooler responders” although this is not yet fully understood or verified.

But some very recent research has found a darker side to oxytocin, and one that leaders and HR need to be cognisant off. The research from North Western University in the USA found that it can increase emotional pain. Oxytocin seems to be the reason stressful social situations, like having a bullying boss or extreme stress in a team, have an impact long after they occur and can trigger fear and anxiety long past the event. This is because the hormone strengthens the social memory in a specific region of the brain

If a social experience is stressful or negative it activates a part of the brain called the lateral septum, the pathway or route oxytocin uses to amplify fear and anxiety and that intensifies the memory and makes people susceptible to feeling fear in stressful situations in the future. Hopefully, oxytocin also intensifies positive social memories and, therefore, increases feelings of well-being, but that research has not been done yet.

We have written before about the role of threat and fear and its impact on brain functioning. High levels of trust are associated with decreased amygdala activity and low fear. When there is a breach of trust the brain’s conflict detector the ACC activates the amygdala. Trust and fear are inversely related; fear activates the amygdala and trust decreases activation. Trust therefore frees up the brain for other activities like creativity and planning and decision making.

The implications for engagement

If HR wants to increase trust in the workplace the best place to start is at home! By being trustworthy and by trusting people more. There is evidence that this works at both a conscious and an unconscious level. At a conscious level; people want to honour your trust in them, at an unconscious level the research above suggests it also works on a deeper, neurological bases. This has the potential to create a snowball effect on trust. Showing people that you trust them rises the oxytocin levels in their brains and that makes them potentially more trustworthy. They then also show more trust in you and that in turn raises your oxytocin levels, causing you to be more trustworthy and to show more trust in them. One method recommended by Edelman for doing this is storytelling. You can learn more about the science of storytelling in our HRZone article and how to construct a powerful story in our HR tips. HR departments or professionals who show constant distrust can trigger the reverse snowball and thus negative responses. At best people will follow the norms. At worst they could respond aggressively and will definitely not be engaged!

And the leadership team I was working with? Well it is work in progress but education is a powerful thing!